Dollar SignEnterprise-scale businesses will spend more than $235 billion on cloud computing architecture and services by 2017, 35% more than the $174 billion forecast for 2014 and triple the $78 billion spent in 2011, according to a new report from IHS.

Year-over-year, enterprises will spend 20 percent more on cloud architecture and services this year than they did in 2013, when they spent $145 billion, according to IHS’ “Cloud & Big Data Report – A Paradigm Shift in the ICT Industry 2013.”

“Enterprises today are trying to create faster, more efficient I.T. environments to ensure more responsive, agile and successful businesses,” IHS senior director for information technology Jagdish Rebello, Ph.D., was quoted in a press release. “In these cloud-based settings, enterprises also want to integrate the deep analytical power of Big Data, which will give them competitive advantages through insights about present and prospective customers.”

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Mobile network operators will join enterprises in expanding their cloud activities and presence, IHS says. The coming peak in mobile handset revenues will lead them there in search of new sources of revenue generation. “Mobile operators are desperately searching for the next innovation,” Rebello commented. “Software and cloud services could be the next wave of differentiation that turns the downward mobile handset revenue curve back up.”

Enterprises and mobile network operators alike will face technological, operational and business challenges as they try to make the transition to cloud architectures and applications services, IHS continues, challenges with regard to cloud systems’ performance, service differentiation, new business models and the evolution of multiple cloud ecosystems.

Added Rebello, “The players in the cloud space will have to determine their specific cloud performance requirements, as well as find their own niches and sort out or—more likely— invent their own best business models.”

The cloud itself will change as enterprise and mobile network operator initiatives unfold. While cloud networks will enable location-independent resource pooling, it could also raise data retention costs. Over 78 percent of disk storage will use cloud connections by 2017, IHS says, which makes the need for less expensive cloud storage a major concern.

“Ultimately,” Rebello concluded, “the cloud will embrace more than just online storage; it will truly enable the market for the Internet of Things, in which connections move beyond computing devices and begin to power everyday gear and objects through all facets of life. Here the cloud could reign supreme, providing the nexus where those critical connections can be made.”

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